Sterling swaps were to purchase flat, Ahern claims

STERLING EXCHANGES:STERLING EXCHANGES carried out between former taoiseach Bertie Ahern and a Manchester businessman possibly took place in a bar in a hotel in Manchester or in a car, the tribunal heard yesterday.

Mr Ahern, on his 10th full day at the tribunal, said he was "prudently" putting money aside for a possible investment in a flat in Manchester. He exchanged up to £3,000 with Tim Kilroe on half a dozen occasions, generally in Manchester but once or twice in Dublin between 1991 and 1993.

The exchanges partly explained £15,500 in lodgements made to his account and those of his daughters between March and October 1994. The balance was made up from his winnings on horses.

Mr Ahern said he made the exchanges so that he could collect the deposit in sterling to put on the apartment, at Salford Quay in Manchester, which was being built by developers Urban Waterside.

Mr Kilroe, who was also part of the 1994 Manchester "whip-around" of £8,000 sterling, had drawn his attention to the property, he said, and the unit he was interested in would have cost £85,000 sterling. He said he thought it would have been a good investment to make after his separation was completed, in late 1993.

However, though he said it would have been a good investment, by the end of 1993 he had not invested the money, deciding instead he would be "far better off" sorting himself out at home.

Mr Ahern said he told Mr Kilroe that he had no bank accounts and explained he wanted to change Irish pounds into sterling.

"I told him I wanted to build up a sterling deposit," he said. "Changing £2,000 to £3,000 with Tim Kilroe wasn't a big deal for him or for me, to be honest."

He said the transaction could have occurred in a bar or Mr Kilroe's car. He usually phoned Mr Kilroe in advance and would bring the money over to Manchester.

He said Mr Kilroe or one of his staff would meet him at the airport, and they would go to the Four Seasons Hotel, which Mr Kilroe owned, or occasionally to the Copthorne Hotel. They would meet later on that night, or the following day at breakfast and the transaction would be carried out.

"In Manchester . . . you could be carrying up to £3,000 in cash in your pocket . . . a sizeable amount of money," counsel for the tribunal Des O'Neill said.

"Back in the '70s when I was a cashier I used to go up to Ballyfermot and lodge £50,000 with no security," Mr Ahern said.

"So if you're saying was I afraid going around Manchester . . . except the City supporters got at me, that would be the only fear. Other than that, I'd have no fear."

Mr Ahern also recalled one occasion when Mr Kilroe came to Dublin. He drove over, Mr Ahern said, and called into St Luke's because they had an arrangement to go to dinner. "We were talking about a project he was involved in . . . he said he had sterling with him and I changed it . . . I had asked him previously," Mr Ahern said.

He said the project they discussed had no connection with the financial transaction they carried out. "He never asked me to support any commercial project ... or assist in any way," Mr Ahern said.

He also pointed out, "because someone outside will say", that Mr Kilroe was a significant horse owner with up to 50 horses in training at any time - "some of the finest horses of the '80s and '90s", including a Cheltenham winner called Forgive and Forget.

Mr O'Neill asked Mr Ahern why he did not just save his Irish money for the deposit and then bring it over to a building society in Manchester in a suitcase.

"Maybe that's what you'd do, but I don't have that amount of cash to be able to do that . . . I never carried big amounts of money in a suitcase to Manchester," Mr Ahern said.

Mr Ahern could not explain why, after he decided not to purchase the flat, he did not lodge the sterling in one transaction, instead of in three separate transactions.

"You lodged this money piecemeal . . . there must have been some reason," Mr O'Neill said.

"I don't know - all as I can conclude is that I didn't do that with any of my monies," Mr Ahern said. He said he did lodge the sterling between March and October 1994, but then forgot about it.